Decree-Law no. 26/2015 entered into force in February 2015. This law brought several amendments aimed at creating more favourable regimes with regard to the approval of plans for the recovery and long-term financing of companies and, consequently, the issuance of hybrid capital instruments, in order to encourage the participation of investors that can bring capital and additional expertise.

For this reason, the aforementioned law amended the Company Recovery System through Extrajudicial Agreements (SIREVE), the Special Revitalization Procedure (PER, integrated into the Insolvency and Business Recovery Code - CIRE) and the Commercial Companies Code.


With the amendments made by Decree-Law 26/2015, the legislature aimed to ensure the efficacy and practical effect of using SIREVE, both by limiting the situations in which it can be used and by introducing a mechanism making it easier to signal the existence of financial difficulties in good time. In addition, given their fundamental role in ensuring the viability of companies, as well as in maintaining and protecting jobs, it was deemed to be of utmost importance to provide additional protection for loans granted during the negotiation proceedings.

Scope of application: SIREVE applies only to companies and sole traders with organised accounts and which are in a difficult economic situation or a situation of imminent insolvency, the possibility available under the previous regime of companies in a situation of actual insolvency making use of this procedure having been eliminated.

As such, besides being in a difficult economic situation or a situation of imminent insolvency, the company must also obtain an overall positive assessment of certain financial indicators for the last three complete accounting periods at the date of submission of the application, which are: (i) financial autonomy, measured as the ratio between the company’s equity and its total net assets (positive assessment: more than 5%); (ii) the ratio between earnings before depreciation, interest, and taxes and the value of interest and similar expenses (positive assessment: ratio greater than 1.3); and (iii) the ratio between financial debt and earnings before depreciation, interest, and taxes (positive assessment: ratio equal to or greater than 0 and less than 10).

Recovery plan: following the amendments, the recovery plan is considered approved when: (i) it has been voted on by creditors whose claims represent at least 1/3 of the company’s total debts, has obtained the favourable vote of more than 2/3 of all the votes cast and more than half of the votes cast correspond to non-subordinated claims, under the CIRE, not considering abstentions; or (ii) it has obtained the favourable vote of creditors whose claims represent more than half of the company ’s total debts and more than half of these votes correspond to non-subordinated claims, under the CIRE, not considering abstentions.

Creditor guarantees: in the event of insolvency, creditors that, during the proceedings, finance the debtor’s activities by providing capital for its revitalisation, enjoy general preferential claims, which have priority over the general preferential claims granted to employees.

Likewise it is envisaged that guarantees agreed between the debtor and its creditors during the proceedings, in order to provide the debtor with financial means to pursue its business activity, shall remain in place for a period of two years, even if, at the end of the proceedings, the company is declared insolvent or it starts a new restructuring process.

Benefits: the measures arising from an agreement signed under SIREVE benefit from the application of the fee and tax relief provided for in Articles 268, 269 and 270 of the CIRE, pursuant to Article 16.2 of the same legislation.

Mechanism for analysis of economic and financial performance: the law also introduces a mechanism for mandatory prior analysis of the company ’s economic and financial situation, carried out through the IAPMEI platform. This platform is used to automatically generate information on the company’s economic and financial situation, based on data it provides, and only companies that fulfil the minimum criteria established by law are entitled to start the procedure. This platform can also be used, free of charge, by any company wishing to analyse its own economic and financial situation, this use or its results not implying a requirement to be subsequently subject to SIREVE or to any other business recovery procedure.

Application in time: the implementation of the platform for analysis of a company ’s economic and financial situation is due to be completed within four months from the entry into effect of the abovementioned amendments (1 July 2015).

Effect of bringing SIREVE proceedings: as an innovative measure, it is established that once the agreement is signed, enforcement actions for the payment of amounts brought not just against the company, but also against its guarantors with respect to obligations guaranteed are automatically extinguished and, unless there is a transaction, and the actions aimed at demanding compliance with monetary obligations  brought against the company and/or against its guarantors with respect to guaranteed obligations remain suspended, due to prejudiciality. However, this measure applies exclusively to creditors that have signed the agreement.

Confidentiality: with the exception of communications essential to the procedure in the negotiations and for the reporting of statistics, the procedures commenced under SIREVE are confidential. The confidentiality applies to all information made available by companies on the IAPMEI platform during analysis of their economic and financial situation.


With Decree-Law 26/2015, only Article 17-F of the CIRE was amended. For this reason, and in order to standardise the two mechanisms with regard to the recovery plan, approval is given to the recovery plan that: (i) being voted on by creditors whose claims represent at least 1/3 of the total claims with voting rights, on the provisional cla ims list, receives favourable votes from more than 2/3 of all the votes cast and more than half of the votes cast correspond to non-subordinated claims, not considering abstentions; or (ii) receives favourable votes of creditors whose claims represent more than half of all the claims associated with voting rights and more than half of these votes correspond to non-subordinated claims, not considering abstentions.


Important amendments were  also made to the Commercial Companies Code. These amendments aim to develop alternatives to bank financing, namely by extending the range of financing options through hybrid capital instruments and reviewing the rules applicable to bond issuance, such as those concerning issuanc e limits and exceptions.

Preferred shares without voting rights: Article 341 was reformulated and now allows a company’s memorandum of association to authorise the issuance of preferred shares without voting rights up to an amount representing half of the share capital. These shares attribute the right to a preferred dividend of not less than 1% (as opposed to the previous 5%) of their nominal value (or, failing that, of their issuance value, less any share premium).

With a view to investor protection, there is now a specific regime for preferred shares without voting rights subscribed exclusively by qualified investors, within the meaning of the Portuguese Securities Code, and which are not traded on a regulated market. In these cases, the memorandum of association can state that they only attribute the right to the preferred dividend provided for in the memorandum, without participation in the remaining dividends to be attributed to all the shares.

In this respect, the memorandum of association can: (i) otherwise exclude or regulate the arrangement for preferred dividends not paid in a specific financial year; (ii) provide that the preferred dividend corresponding to financial years in which no distributable profits were generated be deemed lost; (iii) provide that the preferred shares are converted into ordinary shares in the circumstances specified in the conditions of issuance related to a deterioration in the financial situation of the company that calls into question the payment of the preferred dividend; (iv) provide a number of financial years different from the general rule (two financial years), but not more than five financial years for purposes of attributing voting rights due to non-payment of the full preferred dividend.

Redeemable preferred shares: Article 345.1 now clarifies that the redemption rules are also applicable to shares without voting rights. Under paragraph 6 of that Article, after redemption, an amount equal to the nominal value of the shares redeemed, or in the absence of a nominal value, equal to the issuance value, must be placed in a special reserve that can only be used for incorporation into the share capital, without prejudice to its elimination if the capital is reduced.

Bond issuances: bond issuances by limited companies are now dependent on  the company presenting, after the issuance, an equity to assets ratio of 35% or higher, its calculation based on: (i) the balance sheet of the previous financial year, as long as it was closed in the six months preceding the date of the bond issuance; (ii) a special balance sheet, drawn up as at a date not earlier than the quarter preceding the date of the bond issuance, or (iii) the balance sheet of the first half of the current financial year at the date of the bond issuance, if the company is required to publish half-yearly accounts. Under these terms, compliance with the equity to assets ratio is verified by means of an opinion of the supervisory board, of the individual auditor or of the statutory auditor.

Some exceptions were made to this general rule, in which the limit indicated above does not apply, in addition to the situations now provided for in the Code, namely: (i) companies that present a credit rating for the issuance or the issuance programme or the company, in this latter case for the type of credit that include the bonds to be issued, attributed by a rating agency registered with the European Securities and Markets Authority or recognised as an external rating agency by Banco de Portugal; (ii) issuances with a nominal unit value equal to or greater than €100,000.00 (one hundred thousand euros), or its equivalent value in euros or subscribed exclusively in minimum batches of a value equal to or greater than €100,000.00 (one hundred thousand euros), or its equivalent in euros; and (iii) issuances that are fully subscribed by qualified investors, within the meaning of the Portuguese Securities Code, and as long as the bonds issued are not subsequently placed, directly or indirectly, with non-qualified investors.

Joint representatives of bondholders: the joint representative can be now a law firm, an audit firm, a financial intermediary, an entity authorised to provide representation investor services in any Member State of the European Union or a natural person with full legal capacity, even if not a bondholder, although their independence criteria have been strengthened. The rules related to impairments to the appointment of common representatives have also been reinforced and there is now a possibility of initial appointment under the issuance conditions and limitation of liability.

Finally, bonds can now be issued that (i) are convertible into ordinary or preferred shares, with or without voting rights, or into other securities; (ii) confer the right to subscribe one or more ordinary or preferred shares, with or without voting rights; (iii) award subordinated credit rights; (iv) result from the conversion of other credits of shareholders or third parties over the company ; and (v) present special guarantees over assets or revenue of the issuer or of a third party.